Benefit Street Partners Realty Trust – Investigation
The White Law Group is investigating potential securities fraud claims involving broker-dealers’ improper recommendation that some investors purchase REITs like Benefit Street Partners Realty Trust.
Brokerage firms that sell such products are required to perform adequate due diligence on the investments. They must ensure a reasonable likelihood of success, and to evaluate whether the investments are suitable in light of the client’s age, net worth, investment experience, and investment objectives.
On January 30, 2017, Realty Finance Trust, Inc. changed its name to Benefit Street Partners Realty Trust Inc. This company is a real estate investment trust launched and formerly managed by Realty Financial Advisors Inc. It invests in the real estate markets across United States. The firm seeks to acquire, originate and manage a diversified portfolio of commercial real estate debt investments secured by income-producing properties.
Risks of REITs
Real estate investment trusts (REITs) are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex. They are most often better suited for sophisticated and institutional investors.
Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling REITs – as high as 15%. Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. Unfortunately, in many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.
In addition to the high risks, non-traded REITs, like Benefit Street Partners Realty Trust, often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.
If you suffered losses investing in Benefit Street Partners Realty Trust and would like a free consultation with a securities attorney, please call The White Law Group at (888) 637-5510.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.